Portuguese giant Mota-Engil led a consortium which partnered with subcontractors including the Portuguese subsidiary of Chinese state-owned CRRC, and they made a bid last year to develop the new Lisbon line.

Then in November, the European Commission launched a probe to investigate whether CRRC had an unfair advantage due to foreign subsidies, which a senior EU official said were worth billions of euros.

Brussels said on Tuesday it had accepted the consortium's commitments to replace Portugal CRRC with Polish rolling stock manufacturer PESA, which "has not received distortive foreign subsidies".

The EU probe was launched under the Foreign Subsidies Regulation (FSR), which has forced Chinese companies to abandon or curtail projects in recent years.

China has previously said the EU's implementation of the rules has discriminated against Chinese firms and described them as "trade and investment barriers".

The EU insists it is focused on tackling possible market distortions.

"From the very beginning of this mandate, we committed to making full and systematic use of the FSR as a key tool to protect our single market against unfair practices," EU industry chief Stephane Sejourne said in a statement .

"Today's decision on the Lisbon metro shows that our efforts bring results. We remain vigilant to protect public procurement procedures from distortive practices, while maintaining our openness to trade and investment," he added.